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BUILDING A CULTURE AND NETWORK OF COMPLIANCESTEPHANIE TASKER

DAVID LANE

PROVIDENCE ST. JOSEPH HEALTH

OUR GOALS TODAY….

• Learn the importance of adjusting your compliance program to your mission

and values.

• Discuss the importance of being proactive rather than reactive.

• Recognize the culture of “know” is better than the culture of “no”

• How to align with key partners and expand your network.

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CLIMATE AND PRESSURES ON COMPANIES AND INSTITUTIONS INCREASE NEED FOR COMPLIANCE PROGRAMS

• Increased regulatory climate (FCPA, GDPR, etc.)

• Pressure for quality and excellence initiatives across industries.

• Expectations to bring early resolution regulatory problems

• Requirements to detect and mitigate risks from variety of sources

• Challenges to Affect positively the “bottom line”

HISTORY REPEATS ITSELF OVER AND OVER

Regulatory Issue

Regulatory Review

Mandatory Compliance

Program

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FRAUD, WASTE AND ABUSE DETECTION, PREVENTION AND CORRECTION

COMPLIANCE PROGRAM ELEMENTS

SO HOW DOES AN EFFECTIVE ETHICS AND COMPLIANCE PROGRAM ADD VALUE TO YOUR BOTTOM-LINE ROI AND CULTURE?

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TRADITIONAL ROI APPROACHES: SOME THINK THIS ALONE CREATES A “COMPLIANCE CULTURE”

• Document the loss of revenue

• Document the cost of fines

• Document the cost of mitigation after an audit, fine, or penalty

• Document the savings resulting from a new initiative

• Document revenue created from implementation of a new initiative or program

“STICK” APPROACH DOESN'T ALWAYS WORK TO ESTABLISH A CULTURE OF COMPLIANCE

• Company has not received any fines

• “Business as usual” works generally

• “Good” business practices

• “It won’t happen to us—we’ll take the risk”

• “See no evil, hear no evil, speak no evil”

• Creates a culture of “NO”

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CREATING A CULTURE OF COMPLIANCE—YOUR PROGRAM MUST BE SEEN AND VALUED AS PREVENTION

• Major effort of compliance structure is to prevent issues, fines, and

reputational lost.

• Measuring something that “never happens” is a challenge

• Compliance ROI and a positive culture is more about “staying ahead of

the curve”

• Very little, if any, data on ROI for compliance programs

EFFECTIVE COMPLIANCE PROGRAM AFFECTS CULTURE

• Better Board Decisions• Increased Employee Comfort• Improved Productivity• Increase Employee

Awareness• Identification of Regulatory

Issues• Morale ImprovementsROI

Structure• Does Board know risks?• Access to Board & C-

Suite

Processes• Employee Training• Confidential Reporting• Clear Investigation &

Enforcement

Outcomes

Effective Compliance Program

Inputs

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AUDITING & MONITORING: DEFINING COMPLIANCE AS PREVENTION

Compliance Program CostsCompliance Program Costs

Risk Review & Mitigation ProcessRisk Review & Mitigation Process

ROI Measures:• Avoidance of bad events• Decrease in negative cost outlays• Increase in reputation & retention

ROI Measures:• Avoidance of bad events• Decrease in negative cost outlays• Increase in reputation & retention

BalanceCost of compliance management operations

BalanceCost of compliance management operations

BalanceCost of non-compliance events

BalanceCost of non-compliance events

Compliance Training Needs

Compliance Program Reviews

Mitigation Processes

Compliance Training Needs

Compliance Program Reviews

Mitigation Processes

COMPLIANCE METRICS FOR CULTURE ROI

Number of safety and workers’ compensation claims

Number of lawsuits and related litigation costs and settlement amounts

Amount of Regulatory Fines

Number of Whistleblower Hotline complaints

Number of returned items, refunds, rejected bills, claims

Number of breaches and amounts paid for privacy violations

Number of Discrimination Cases

Number of late orders

Accidents?

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KEY OUTCOME FOR EFFECTIVE COMPLIANCE

PROGRAMS: REPUTATION & ETHICAL CULTURE

• Reputation is key for most company’s bottom line—key factor for PSJH

• Whether a product, a program, a service, an investment, or advice—reputation

drives profits and business

• Effective compliance program supports and enhances reputation

• First requirement for government fines: COMPLIANCE PROGRAM

• Loss of branding momentum

COMPLIANCE METRICS FOR REPUTATIONAL LOSS

Reputational Loss

Market Share

Employee Surveys &

Applications

Newspaper Headlines &

Negative Press

Social Media

Bottom Line

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COMPLIANCE TRAINING AFFECTS POSITIVE CULTURE: TOWARDS A CULTURE OF “KNOW”

• Mandated

• Well-received

• Positive reviews

• Timely

• Better knowledge

• Behavioral change

• Less risk

Gro

wth

in P

osi

tive

Cul

ture

• Cost savings

• Employee retention

• Increased returns

Effective Training Program

Immediate Return Long-term ROI

ROI

ROI Pressures

Elements of an

Effective Compliance

Program

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TOWARDS A CULTURE OF COMPLIANCE

• “Corporate culture is a key differentiator between the companies that sustain winning performance and those who barely meet average benchmarks. Those who get it right thrive when culture and strategy work together. Culture is invigorated when who you are on the inside, and who you are on the outside, is aligned.”

• 72%. of executives say culture is extremely important for organizational

performance

…but only

• 32% say their organization’s culture is fully aligned with the business

strategy

SOURCE: HTTPS://WWW.BLUEBEYONDCONSULTING.COM/MANAGEMENT-CONSULTING-SERVICES/CORPORATE-CULTURE-CONSULTING/?GCLID=CJ0KCQJWXVBDBRC0ARISAKMEC9AFOI2IEDJ7SOZ7CI81LPJF7CKIKYPWEIN1ZMGMBD562WKDTSWFRJCAALZFEALW_WCB

KEY STEPS FOR BUILDING ON A COMPLIANCE FOUNDATION

Inclusion of Compliance

Communication to employees

Feedback on Progress

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CULTURE OF COMPLIANCE: TONE AT THE TOP AND BEHAVIOR FROM THE TOP

• Unitary Policies and Procedures

• Penalties and Recidivism

• Hiring Practices

• Training

• Incentives

• Resolving Conflicts of Interest

• Aligning Interests for ethical decisions

SOURCE: MICHAEL NEUS, NYU SCHOOL OF LAW

CREATING A CULTURE OF COMPLIANCE

Words & Deeds of Leaders

Shared Mission &

Values

Inclusive Day-to-Day

Practices

Positive, transparent relationships with internal

and external partners

Strong Compliance

Program

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BUILDING A CULTURE OF COMPLIANCE….• setting the right tone from the top;

• developing and embedding an effective value statement;

• promoting an open culture within the organization;

• developing a whistleblowing procedure;

• providing impartial, confidential advice on ethical issues for employees;

• developing and embedding an organizational code of conduct;

• training staff in ethics;

• rewarding ethical behavior;

• ensuring disciplinary procedures are effective;

• monitoring organizational integrity, and the effectiveness of techniques.

SOURCE: HTTPS://WWW.CII.CO.UK/KNOWLEDGE/POLICY-AND-PUBLIC-AFFAIRS/ARTICLES/ETHICAL-CULTURE-BUILDING-A-CULTURE-OF-INTEGRITY/27326

QUESTION FOR YOU…

• What are you doing to:

• Walk the talk?

• Engaging your employees?

• Making ethical decisions and demonstrating those actions?

• Encouraging feedback, questions, and dialogue

• Demonstrating the importance of compliance for BBNC

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QUESTIONS?